Sheep producers told to sell hoggs at optimum weight

Sheep farmers have been advised that to achieve maximum producer margin, hoggs should be sold at optimum weight and cleanliness to counterbalance a fall in prices year-on-year.

According to Quality Meat Scotland (QMS), the domestic market is predicted to be well supplied in the coming weeks.

June census figures have shown that the current lamb crop is almost 2% larger than it was last year. This means there is greater likelihood of a higher volume of hoggs to be marketed this year, revealed QMS analysis. As a result, producer prices could potentially be constrained.

Looking towards April, there tends to be a typical increase in the proportion of hoggs heavier than 45kg liveweight.

“In January heavy hoggs can make up more than 25% of the auction offer, rising to more than 30% of the offer as we reach April,” said QMS head of economics Stuart Ashworth.

“This year the proportion of heavy hoggs is currently higher than for several years. These heavy lambs are heavily discounted on a pence per kilo basis, but they often return the same income, if not margin, per head of hoggs in the more desirable retail specification of 40kg to 45kg liveweight.”

He added that the volume of heavy lambs and hoggs can act as a break on the standards quality quotation (SQQ).

“In 2015 and 2016, the proportion of heavy hoggs in the auction offer was higher than the five-year average and began to exceed 30% in March and April 2015 and 2016 when the SQQ price lost momentum. Presenting hoggs to the market that meet buyer specifications will help to maximise the return farmers can achieve.”

Last week, prime sheep prices came under pressure due to the volume of hoggs reaching the market. Latest price updates from Europe show heavy and light prime sheep prices alike coming under pressure post-Christmas.

Since Christmas, prices have dipped by 10% in France, 12% in Spain and 2% in Ireland, according to QMS. When converted into euros, the Great British price has fallen by 4% since Christmas. Spain, Italy and Greece, the main lamb-producing countries in Europe, have seen prices fall up to 13% since Christmas.

When comparing prices to this time last year, the euro price for heavy lamb was 8% lower, with the Spanish 2% lower. Meanwhile, the Irish price was 13% lower and the British was 15% lower.

“Light lamb prices are from 4%-10% lower across the main lamb-producing countries,” added Ashworth. “The weakness of sterling compared to this time last year means that, in sterling terms, the current hogg price, some 5% lower than a year ago, is sheltering the producer from some of the price pressures found in other parts of Europe.”

While slaughter statistics from France and Spain are not yet available, Irish abattoirs have been slightly better supplied through December to January.

Despite this, Ireland slaughtered fewer lambs in the second half of 2016 than in 2015, but they did have a slightly larger lamb crop, which may carry heavier supplies into the first quarter of 2017.

“The continued decline in the French breeding flock suggests they will be slightly less well supplied with domestic product, but the Spanish ewe flock expanded slightly in 2016,” explained Ashworth.

“Despite the fall in French production the longer-term decline in French sheepmeat consumption means this market remains well supplied. French trade data shows that, with the exception of February, imports have been lower in each month from January to October 2016 with the UK, Ireland and New Zealand all under pressure.”

UK prime sheep have been creeping ahead of year-earlier levels through December and January, although total prime lamb slaughter numbers did not match those of 2015.